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Mallinckrodt's MNK-1411 Gets Orphan Drug Status for DMD

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Mallinckrodt plc announced that the FDA has granted orphan drug designation to its pipeline candidate - MNK-1411, which is being evaluated for the treatment of Duchenne muscular dystrophy (DMD). The candidate has received a Fast Track designation by the FDA for the same indication.  
MNK-1411 is approved and marketed outside of the U.S. for certain autoimmune and inflammatory conditions but has not been approved in the U.S.

Shares of Mallinckrodt have underperformed the Zacks classified Medical-Generic Drugs industry year to date. The stock is down 10.3%, while the industry declined 0.6%.

We note that orphan drug designation is granted to drugs capable of treating diseases affecting less than 200,000 people in the U.S. The status makes MNK-1411 eligible for seven years of marketing exclusivity in the U.S., following the FDA approval as well as the ability to apply for research funding, tax credits related to certain research costs, and a waiver of the FDA application user fee.

MNK-1411 has completed a phase I study and the company expects to start a phase II study later in 2017.

Meanwhile, DMD, a devastating and debilitating disease, represents a market with significant unmet medical need. In Sep 2016, another company Sarepta Therapeutics, Inc. (SRPT - Free Report) gained accelerated approval for Exondys 51 in the U.S. for the treatment of patients suffering from DMD amenable to exon 51 skipping. Exondys 51 is the first approved disease-modifying therapy for DMD in the U.S. as well as the company’s first product to receive marketing approval.

Zacks Rank & Stocks to Consider

Mallinckrodt currently carries a Zacks Rank #4 (Sell). Some better-ranked health care stocks in the same space are Enzo Biochem, Inc. (ENZ - Free Report) and Sanofi (SNY - Free Report) . While Enzo Biochem sports a Zacks Rank #1 (Strong Buy), Sanofi holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enzo Biochem’s loss per share estimates narrowed from 12 cents to 7 cents for 2017 and from 11 cents to 3 cents for 2018, over the last 30 days. The company delivered positive earnings surprises in all the trailing four quarters, with an average beat of 55.83%. The share price of the company has increased 63.7% year to date.

Sanofi’s earnings per share estimates increased from $3.08 to $3.18 for 2017 and from $3.26 to $3.30 for 2018, over last 30 days. The company pulled off positive earnings surprises in three of four trailing quarters, with an average beat of 5.10%. The share price of the company has increased 20.7% year to date.

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